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In response to rumors it's considering a major asset sale or business model change, Research In...

In response to rumors it's considering a major asset sale or business model change, Research In Motion (RIMM -6.7%) reiterates its commitment to its existing turnaround plan, while noting its recent hiring of JPMorgan and RBC to evaluate "strategic alternatives." Today's huge selloff, fueled by a harsh Morgan Stanley downgrade, drives home just how little confidence the Street has in that turnaround plan.
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Comments (4)
  • frankiethecat
    , contributor
    Comments (36) | Send Message
     
    Today's huge selloff on high volume of over 31 million shares is using the cover of the MS downgrade to shove down RIMM's market price another 1.00 and force it below 9.00, and it did reach a new annual low of 9.01. Several well financed, well organized players want to drive down RIMM's shareprice to around $7 or lower so that blackberry business users and corporate accounts will rush to throw away their blackberry handhelds for touchscreens, most likely Apple's.

     

    I smell a rat with Morgan Stanley's harsh downgrade, perhaps MS was angry they lost the RIM account to competitor JP Morgan to "review strategic options"? There seems something terribly vindictive going on. Maybe MS represents the fired co-CEO's who have decided to make a hostile takeover play for RIM and take it private if the RIMM shareprice can go below $8/sp

     

    Morgan Stanley obviously favors Apple over everything else and so of course RIMM is going to be on MS's sh-t list.

     

    http://bit.ly/Q5Ko87

     

    "Morgan Stanley projects that Apple now trading at $577 a share will reach $960. That is an increase of 66% in one year! Even small cap stocks usually do not increase that much in a year!"

     

    "If so Morgan Stanley believes that the S&P 500 will rise by 4%, while Apple has a 66% increase? This seems very unlikely."

     

    Bottomline: MS has overstated RIM's losses and this analyst was happy to push RIM off a cliff and give RIMM's shareprice a good beating.
    25 Jun 2012, 05:18 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3085) | Send Message
     
    I doubt companies pay attention to share prices when considering future device purchases. End device cost is a far larger concern. Even with that, the market for smartphones is more consumer driven than business driven.

     

    There is some solid volume at the 9.00 and 10.00 strike prices on RIMM options. So far not much activity at 8.00 and almost none at 7.00 looking ahead to July, though 8.00 looks better towards August. September options are still clustered near 10.00.

     

    Downgrades can help options positions, especially for those who do not hold options until expiration. Implied Volatility is now over 65% and we might reasonably assume most of the high volume was options driven.
    25 Jun 2012, 05:44 PM Reply Like
  • Loon-a-tick
    , contributor
    Comments (1914) | Send Message
     
    The share price no longer reflects the value of a stock when large institutional investors are all that are left in the market. When all the little people were in it tempered their machinations.
    Just look at volumes during the day...peaks and valleys....we are getting squeezed for every penny we put in. I am just sitting on everything and waiting to see where all of this will end up.
    My investment in RIMM was a small bet that I hoped could potentially pay off. It's not looking good right now...but if this company was worthless it could easily have been driven lower. We'll see today.
    26 Jun 2012, 07:17 AM Reply Like
  • TomasViewPoint
    , contributor
    Comments (4842) | Send Message
     
    Downgrade to "underweight" was appropriate. Who in their right mind would recommend anything higher? This is highly speculative and RIM's management has made it more so.
    26 Jun 2012, 12:15 PM Reply Like
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